Hospital Mergers Fail to Perform

A new British study reports that merging hospitals does not result in improved service delivery and cost-effectiveness. According to a press release, failing hospitals failed to upgrade their functioning once they had merged with other hospitals.

University of Bristol researchers examined the books of hospitals that had merged in the late 1990’s and early 2000’s. During that time period, half of the acute hospitals in England consolidated. The researchers learned that the hospitals’ deficits actually grew post-merger! Four years after the mergers, hospital admissions typically had fallen by about 10 percent, and waits for elective treatment had been lengthened. Neither quality of care nor profit earning had improved.

The hospital executives and health plan administrators who designed these mergers surely had something else in mind when they decided to go through costly and complicated mergers. The main reasons they offered the researchers were to streamline facility use, provide better patient care, and increase earnings. Quite the opposite occurred.

Instead of merging, hospitals can strengthen their financial health and patient care by assessing their existing facilities to ensure that they are used to capacity. Updating the building’s design to meet current medical standards improves the hospital’s appeal. Underused facilities can be bolstered by acquiring physician practices and integrating them into the hospitals’ offerings. Hospitals can maximize use of their facilities by intensifying marketing efforts to target populations.

Every business, including healthcare, requires sharp strategizing and constant fine-tuning. Planning the best way to use its facilities can help a hospital stay ahead of the game.